Asian markets kicked off the week with strength; but with the exception of the Chinese markets, which continued rising in response to stronger than expected economic data released mid-week, the strength receded by the end of the week. Hong Kong’s Hang Seng continued its winning ways, rising 2.7% for the week and easily outperforming markets across the region. China’s Shanghai Composite added 1.8% for the week after releasing data showing stronger than expected GDP growth and industrial production in December. Japan’s Nikkei ended the week with a modest 0.7% gain, while South Korea’s Kospi tacked on 1% for the week. The worst performance came from Australia’s S&P/ASX 200, which fell in the last four sessions and posted a 1.1% weekly loss.
The coming week is quiet on the economic data front for Asia, with the exception of the Tuesday monetary policy release from the Bank of Japan. Still, no change is expected from the BoJ, and the monetary policy statement is unlikely to have much impact on markets. Analysts are saying crude could pull back this week, which would be a negative for Australia’s equity markets. The S&P/ASX 200 is already the worst performing Asian market, and the coming week could see it dropping further into the red. As long as the People’s Bank of China remains silent, Chinese investors should remain upbeat, lifting both the Shanghai Composite and the Hang Seng.
European markets struggled for most of the week, but a strong end on Friday helped lift them into positive territory on a weekly basis. The pan-European Stoxx Europe 600 had a 0.6% weekly gain, while Germany’s DAX outperformed as it tacked on 1.4% for the week. The CAC 40 in France underperformed with a slight 0.2% gain. London’s FTSE was worse off, and a gain on Friday wasn’t enough to erase four consecutive sessions of losses. On a weekly basis the FTSE was 0.6% lower, underperforming nearly all major global equity indices.
The upcoming week could see some volatility in European markets; the ongoing strength in the Euro will certainly pressure equities if it continues. Mid-week will see the release of PMI data that could put the brakes on the rise in the Euro, but Thursday will see the results of the latest European Central Bank monetary policy meeting. Investors will be analyzing any comments from that meeting very closely to get some idea of the future of monetary policy in the Eurozone, and the Euro is likely to see volatility ahead of, and after the monetary policy statement.
U.S. markets had a mixed week, with investors coming back from a holiday extended three day weekend to send markets lower. They rebounded strongly the next day, but then took a pause before roaring into the weekend with a strong Friday performance. On a weekly basis the Dow Industrials outperformed with a 1.1% gain, while the Nasdaq was close behind with a 1% weekly gain. The S&P 500 underperformed, but it was a modest underperformance as the S&P was 0.9% higher for the week.
The upcoming week could see more mixed performance as the earnings season in the U.S. gets into full swing. Daily performances could be heavily impacted by earnings releases, especially on a per sector basis. The latter half of the week will also be full of economic data, starting with PMI data Wednesday, moving to home sales data Thursday and finishing with GDP and durable goods data Friday. Economic data from the U.S. has been strong lately, so we could see markets getting a boost later in the week in response to more strong data.
The cryptocurrency market got off to a slow start but by Tuesday was in the midst of a massive correction. Bitcoin lost more than 30% of its value and nearly every other coin followed in its wake, with losses of 30-50% seen across the board. Wednesday saw markets stabilize and a rebound ensued throughout the weekend. There was no real catalyst for the selloff, other than a supposed connection between crypto and the Chinese Lunar New Year holiday, which has seen Bitcoin falling every year in mid-January.
Cryptocurrency markets are looking more positive heading into the new week, and with the correction out of the way could be gearing up for their annual spring rally. Prices remain near recent lows, giving a good base for a rebound in the coming week. There have also been solid areas of support created for most of the major cryptocurrencies, indicating there’s a floor for any pullbacks. Ripple has been exceptionally volatile in the space, and may be worth keeping an eye on for a potential rally back to the $2 level.
|All Day||EUR||Eurogroup Meetings|
|13:30||CAD||Wholesale Sales m/m|
|Tentative||JPY||Monetary Policy Statement|
|Tentative||JPY||BOJ Outlook Report|
|Tentative||JPY||BOJ Policy Rate|
|06:30||JPY||BOJ Press Conference|
|Day 1||ALL||WEF Annual Meetings|
|09:30||GBP||Public Sector Net Borrowing|
|10:00||EUR||German ZEW Economic Sentiment|
|09:00||EUR||Flash Manufacturing PMI|
|09:00||EUR||Flash Services PMI|
|Day 2||ALL||WEF Annual Meetings|
|09:30||GBP||Average Earnings Index 3m/y|
|09:30||GBP||Claimant Count Change|
|14:45||USD||Flash Manufacturing PMI|
|14:45||USD||Flash Services PMI|
|15:00||USD||Existing Home Sales|
|15:30||USD||Crude Oil Inventories|
|09:00||EUR||German Ifo Business Climate|
|Day 3||ALL||WEF Annual Meetings|
|12:45||EUR||Minimum Bid Rate|
|13:30||CAD||Core Retail Sales m/m|
|13:30||EUR||ECB Press Conference|
|15:00||USD||New Home Sales|
|All Day||AUD||Bank Holiday|
|09:00||EUR||M3 Money Supply y/y|
|Day 4||ALL||WEF Annual Meetings|
|09:30||GBP||Prelim GDP q/q|
|13:30||USD||Advance GDP q/q|
|13:30||USD||Core Durable Goods Orders m/m|
|13:30||USD||Durable Goods Orders m/m|